The fictions of ObamaCare

Monday

Jun 17, 2013 at 6:13 AMJun 17, 2013 at 6:14 AM

U-T San Diego

Covered California is the new state agency that will oversee the health-insurance exchange through which uninsured residents and employers can buy coverage as ObamaCare takes full effect on Jan. 1. Given the enduring unpopularity of the Affordable Care Act, it is vital that Covered California do all it can to create a strong first impression of competence and trustworthiness.

That's why the new state agency's recent news conference was so disappointing. "The big news today," declared Peter Lee, executive director of Covered California, "is that because of the Affordable Care Act, we've hit a home run for consumers." The agency said rates that Californians would have to pay were significantly less than expected and "ranged from 2 percent above to 29 percent below the 2013 average premium for small-employer plans in California's most populous regions."

This triggered a wave of upbeat coverage. But this is a slick, misleading framing of how ObamaCare will affect millions of consumers in California. Small-employer plans, because they already include some of the broader coverage mandated by ObamaCare's "community standards," are much less likely to see a rate shock than coverage purchased by individuals.

Instead of focusing on people who have insurance through their employers, Covered California's news conference should have focused on by far the largest single group of people who are without health coverage and who will be legally required to have coverage as of Jan. 1: adults with no children. Some categories of childless adults will be absolutely hammered. Avik Roy of The Manhattan Institute cited the agency's own internal reports to show that premiums for individually purchased plans will cost more than double the plans that are now available to male nonsmokers 40 and under in California. Except for very poor people, the subsidies ObamaCare provides to low-income individuals are unlikely to come close to covering the increase in premiums.

ObamaCare's fans have always emphasized its upside — making sure insurance is available to all; allowing the young to remain on their parents' plans until age 26; expanding the availability and use of preventive health care. But from the president down, advocates of his health-care overhaul have often peddled the fiction that it will somehow save everyone money, too. That's just not true. And whether you like or don't like ObamaCare, you should want the state agency implementing it to be candid about its likely effects.

Instead, as the Cato Institute's Michael F. Cannon writes, we've got the head of Covered California offering this spin: "See? ObamaCare costs no more than this other expensive coverage you don't want!"